Practice question
What happens under Article 1290 when all legal-compensation requisites are present?
- Both debts necessarily remain wholly enforceable until a new contract is signed.
- Only the older debt is extinguished, regardless of amount.
- The debtor may choose to create a new creditor without consent.
- Both debts are extinguished by operation of law to their concurrent amount, even without the parties’ awareness.
- Every accessory right unrelated to the debts passes to the State.
Legal references
- https://lawphil.net/statutes/repacts/ra1949/ra_386_1949.html — Civil Code, articles 1278–1290.
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